Module 1. Introduction to eBusiness
What is eBusiness? Electronic business, commonly referred to as "eBusiness" or "e-business", may be defined as the application of information and communication technologies in support of all the activities of business. http://en.wikipedia.org/wiki/Electronic_business (added by mjw) “Exchange of economic value facilitated by electronic media” Carrying out business transactions in electronic form using computer and telecommunication networks.-Buying and selling over digital media How ecommerce differs from Traditional Commerce Core strategic decisions - commingled with technology decisions Speed-based competition – first mover advantage? The store is always open Screen-to-customer interface – mass customization Customer controls interaction Online behaviour can be tracked/measured – new metrics eBusiness Scope E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. http://en.wikipedia.org/wiki/Electronic_business (added by mjw) Types of organizations Brick-and-Mortar-conduct most of their business off-line, selling physical products by means of physical agents Pure-play-conduct business activitiessolely online Click-and-mortar (click-and brick)-conduct some ecommerceactivities, but do their primary businessin the physical eBusiness & eCommerce eBusiness encompasses eCommerce -Includes activities that do not involve direct exchange of economic value -such as front and back office applications -customer service and support, -employee services, -investor relations and shareholder services, etc. *eBusiness strategy provides the framework for carrying out eCommerce. Ecommerce Drivers -Expand universe of potential buyers -Increase sales --Meet customer expectations-Increase brand/product recognition -Ease of doing business -Competitive pressure -Cost effectiveness -Provide more information to customers -Improve customer service -New sales channel Electronic Data Interchange (EDI) : standard way of electronically encodingand exchanging Line of Businessdocuments(POs and invoices, etc. between organizations) -Facilitated by private networks called VANs (Value Added Networks) or through the internet -EDI is widely used by large corporations and government agencies to communicatewith their suppliers; e.g., Wal-Mart. Two major standards: •ANSI X 12 •UN/EDIFACT Various EDI “dialects” created by various large buyers Beyond EDI: -EDI is mostly used by large corporations -High entry cost -High operating costs due to expensive transmission through VANs -Not a universally accepted “standard” -Most EDI vendors now offer internet-based EDI solutions : reduce costs, do not solve interoperability issues Forces of Change: *Removal of Barriers *Growing Access to Internet *Security (Firewalls & Encryption, PKI) *Payment Systems *PIPEDA (Personal Information Protection and Electronic Documents Act) Benefits *Cheaper *Faster *More convenient *Better selection *More customization/personalization *Richer package (e.g. additional Info. to customer – FedEx) *Wider reach *More controllable Effect on Business Integration of strategies and processes (business and ecommerce goal Congruence) Customer-centric value chain Pillars of ECommerce *information *relationships *transactions *security/control Most businesses will become eBusiness Business Models (Describe a company’s business) ''Value propositions:bundle of products and services, and the value as perceived by the customer. 'Target customer segments':groups of people with common characteristics for which the company creates value. 'Distribution channels':means of the company to get in touch with its customers refers to the company's marketing and distribution strategy. 'Customer relationships':links a company establishes between itself and its different customer segments. 'Value configurations':The configuration of activities and resources. 'Core capabilities':capabilities and competencies necessary to execute the company's business model. 'Partner network':cooperative agreements with other companies to offer and commercialize value. 'Cost structure':monetary consequences of the means employed in the business model 'Revenue model':way a company makes money through a variety of revenue flows. Strategic Business Trends *Supply Chain Management (SCM) *ERP, ERP & SCM, CRM *Integration *Customization *New Sales Channels *Many small projects vs. risky megaprojects Flexible Business Design *Outsourcing *Partnerships *Joint ventures *Mergers *Takeovers '*There are 3 kinds of businesses behind a single company*''' The World is flat: Chapter1-while you where sleeping: The discovery that the economic playing field had been leveled. Many countries in the East make it a requirement to speak several languages. Business thanks to the web can be done anywhere (outsourcing). Web1.0-(1492-1800’s) changed the size of the world, exploration, imperialism, expanding countries Web2.0-(1800’s-2000) medium to small companies made global changes to do businesses everywhere. Web3.0-(2000-on) Individuals & small groups globalizing-no longer is it just about the Americans-the global playing field has been leveled. The Triple Convergence: 1.) Year 2000- 10 Global Flatteners-All flatteners worked together 2.) Adaptation of Globalization 3.) India, China and Russia are now able to compete and collaborate in the Global economy. *9/11, Enron and the Dotcom bust-provided a political perfect storm to distract us from Globalization* Finance-Concerned with $ and the future plans -preparing accounts, ex. invoices, management accounts, financial accounts for share holders and Inland Revenue -Preparing wages and salaries -Obtaining capital and resources, ex. $ for expansion or to pay for resources such as equipment and materials. Operations: -Concerned with the main business activities -Obtains & converts resources of the business into goods/services Category:The Dot Coms